Annika Lidne did the first public speech on the Disruptive Leap model at the Webcoast conference in March. If you speak Swedish, here’s the video!

For a full-size version of the model in Swedish, click here!

The optimized society is characterized by a modern, well-run democracy with a high living standard and where both economic growth and personal well-being for all citizens are prioritized. Typical optimized countries are the countries of Northern Europe, Canada, Australia and New Zealand.

The optimized company is any big commercial corporation. In order to grow to a dominant position in a competitive market optimization is needed. They operate to maximize short-term profits and have been very successful in a stable growing market. They excel at measuring and fine-tuning performance. However, neither Wall Street nor management bonuses value long-term investments or innovation, which will make it very hard to succeed in a quickly changing disruptive market place.

Lack of management understanding of disruptive innovation, make companies ignore emerging markets as too small and unimportant until they are suddenly left behind by new players and altered customer preferences leading to massive losses. We already see this with companies like Microsoft, GM, Borders and Nokia.

A standardized society have strict rules and regulations that often are enforced severely. They might be legal, they might be cultural and they might be religious. While the Opportunistic society have problems due to the lack of predictability and cohesiveness, the standardized society might suffer a lack of evolution due to the strictness of its rules and regulations. Currently we see that many African countries are entering this stage in a positive fashion, while many of their Middle Eastern neighbors have halted their development here due to the constraints of their religion or authoritative leaders.

An organization at the Standardized stage is characterized by an emphasis on bureaucracy. While processes and procedures to manage the day-to-day operation is a necessity to operate and grow, the risk of the Standardized stage is that the bureaucracy does not facilitate business but instead becomes a hindrance due to conformity, sluggishness and authoritative leaders with an agenda to control rather than evolve. At the standardized stage we find many government organizations, NGOs and traditional businesses.

From a societal view, an opportunistic society is a society before a cohesive and enforced legal system is in place. It’s a society much like the Wild West, where the strong rule by the power of force. During a war, even a modern society can temporarily fall back into the opportunistic stage as we have seen both in the Balkans and in Iraq. Currently countries like Afghanistan and Cambodia are at the opportunistic stage since even though a legal system do exist, it is not enforced and often put out of action by corruption or by the whims of a dictator or other strong leader.

Opportunistic companies are typically most new companies and startups. They have  no set processes, policies or guidelines. Things evolve ad hoc as they are needed.  At this stage we also find a lot of small businesses, craftsmen and consultants. In some older companies ad hoc is the main leadership philosophy that sometimes spiral into an unorganized chaos.

What all companies at the opportunistic stage have in common is that they grab opportunities as they arise. They are very flexible with short lead times and small, flat organizations, more due to that the individual initiative circumvents structure and rules. They can quickly evolve into and past the following stages, due to the lack of set processes and procedures. They live to please their customers and usually work on the customer’s terms.

The Opportunistic stage shares some characteristics with the most developed stages, since it is characterized by the speed and flexibilty of the SocioSourcing stage and involves a strong focus on the customer like the Augmented Immersion stage. Of course the big difference lies in the human effort needed to be predicting the customers next move.

This might especially be the case for self-employed consultants whom may well be at the SocioSourcing stage when it comes to areas like branding, relationship building, sales, communication and tech tools. They also often have a direct relationship with their customers to the level of being able to almost predict their needs and thus operate at the beginning of the Augmented Immersion stage.

When it comes to plans, procedures and policies, however, it is highly unlikely that they are able to operate at a higher level than the Opportunistic stage which a the most fundamental level set the limits to their ability to grow their business.

At the heart of the Disruptive Leap concept is the Disruptive Leap Model.

The model, although of vastly greater scope in its origin, is developed to facilitate business strategy planning and execution. The model consists of three different parts: the five disruptive stages (circles) within the four business areas (slices) and the predictive patterns we suggest for business evolution within the model.

The Disruptive Leap Model, just like the game of chess, can be used both for the fun of sharpening your thinking or as a practical metaphor for strategic planning. The difference is of course that chess was about 6th century Indian military strategy and the game of Disruptive Innovation is about 21st century business strategy. To continue the analogy with chess to further explain what we mean by the Disruptive Leap Model:

The aim of the game is to create a general and action-oriented framework for helping businesses evolve in the acceleratingly changing business environment – no matter the size of the business, the market or the level of competency of the player.

The board is Ken Wilber‘s AQAL model including Don Beck‘s gravesian model of progressing stages of complexity.

The pieces are tools and activities within the four main areas of any business.

The rules are our own elaboration on Clayton M Christensen´s theory of disruptive innovation paired with the evolutionary thinking of several thinkers included in Ken Wilbers framework.

The sociosourced society is characterized by a post-industrial globally connected meritocracy where success is measured in personal influence rather than official position, traditional societal standing or wealth. Emphasis is placed on inspired action, meaningfulness and personal growth.

The sociosourced company is deeply networked, both internally as well as externally. Internet technology is as integral to its corporate DNA as cheap electricity and labor are to the Optimized corporation. Companies rely heavily on building true value for – and strong relationships with – customers, crowdsourced (digital) assets and ideas from outside the corporate walls and fast iterative innovation processes.

Organizations need to provide true value and meaning to both customers and employees to be able to retain them. Companies that are starting to operate from the Sociosourced stage are currently mostly IT-companies: Google, Facebook and Evernote, but we can also see strong characteristics in the values of the sociosourced stage in companies like e-commerce giant Zappos, mining company Goldcorp and new automaker Local Motor.

The direction of business evolution

The most fundamental part of the model is the consecutive series of stages, ranging from Opportunistic to Augmented immersion. These stages are representing disruptive shifts in the development of a business. These stages progress from lower complexity in the middle of the circle to higher complexity at the outer edge.

Having a business idea at all (the Opportunistic stage) is less complex than structuring and standardizing it into an organisation that can repeat the delivery of products or services with certain predictability of the quality of each such delivery at the Standardized level. You have to learn to walk before you can run – always in that order. We have named the stages as follows, beginning with the least complex evolutionary stage:

The Opportunistic stage

The Standardized stage

The Optimized stage

The SocioSourced stage

The Augmented Immersion stage

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This movement from less complex to more complex applies to all aspects of any business. Ken Wilber talks about the inside and the outside of the individual and the collective. We have translated those concepts into a business environment as the intangible and the tangible aspects of the particular and systematic aspects of the operations.

The intangible of the particular = Vision & Leadership

The intangible of the systematic = Brand & Culture

The tangible of the particular = Products & Processes

The tangible of the systematic = Relations & Outcomes

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The ambition with these stages and areas are to portray all modern to near future business strategy decisions in all areas of operations. As a matter of fact, these areas and stages can actually be used to describe almost any kind of human evolution, from inner personal growth to religious, societal, political, technical and business evolution.

Describing the different stages from the point-of-view of different areas of implementation can actually help making it easier to understand why we switch focus when we move on in the next post to describing the stages between which disruptive shifts occur.

But why?

How could the giant fail to see what was going on? Shouldn’t they – above all others – have the insights into the industry? Shouldn’t they be the ones to have the tight relationship with the customers so they know what their customers want in future products? Shouldn’t they – if anybody – have the resources and knowhow to drive change and innovation? Yes, you might think so, but in fact this is rarely the case.

Good businesses fail to make the disruptive leap into future markets because of culture, management and strict economic motives. While there have been a lot of academic research around why businesses fail to evolve in disruptive markets, few have been easy to apply for business people.

Who is to blame?

So, where is the all this change coming from? Innovations in the market? Global disruptive system changes like climate change and financial system failure? Or is it more emotionally driven tranformations like the clash of value systems in a globalized world (think Islam fundamentalism vs western consumerism)? Or the fact that individuals all over this connected planet rapidly are climbing Maslow’s pyramid as their income levels rise and they are suddenly motivated by new needs? Our answer is: all of them.

The four co-existing disruptive forces

We´ve identified four co-existing disruptive forces that creates a massive pressure accumulation for change. The pressure for change is at a all time high primarily due to two interacting mega-trends that are enhancing each other – globalization and connectedness.

Introducing The Disruptive Leap

The Disruptive Leap is a model, an analysis method, a workshop series and an upcoming book by me, Annika Lidne, and my partner in disruption, Mattias Östmar. The goal is to help business people get a status report of in which disruption stage their organisation resides, as well as identify which areas are lagging behind and which are pulling ahead.

Our main theory is that if an organization is unbalanced in its development, and different parts are residing in different disruption stages, the organization as a whole will have a difficult time to facilitate necessary innovation and consequent disruption leaps, as well as retaining key personnel.

The work we currently are doing with The Disruptive Leap is aimed at helping organizations, from small companies to NGOs, government organizations and global corporations, to identify the barriers for evolving their mission and business. And perhaps most of all, get them to survive and prosper in a quickly evolving market and disruptive environment.

Quick and comprehensive

Many management consultants tend to create thick strategic tomes that can be very hard to put into practice and turn into tangible value.

Our goal with The Disruptive Leap is to create a quick and comprehensive analysis method that you can use with your board and your management group but also involve all of your employees. Using modern pattern recognition, we see which areas in your organization that needs to evolve the most, why and how. From the analysis, you get clear objectives, straightforward action points and sharp KPIs to leap ahead and out-evolve your competition, whether they be new smart startups or your old enemies.

The Research Blog

This research blog will be the place where we post some of the text drafts for the book as well as general reflections. Foremost though, the research blog will be a complement to our workshops, seminars and the upcoming book by being the hub where we publish great examples and case studies of the different stages of the Disruptive Leap Model as well as the Big Issues that will be disruptive in and of themselves no matter what you or I do. Big Issues are problems like climate change, mineral scarcity, peak oil, tectonic activity and other  issues we humans have little control over but need to understand in order to evolve our business and minimize risk.

Follow us!

We hope that you like to follow our work in progress on this blog by RSS or email. You are also most welcome to follow us on Twitter (Disruptive Leap, Annika Lidne and Mattias Östmar) or on Facebook as well as sign up to get notified when the book is due.

Please get involve and comment on our writings as well. That is why we do it in public! Welcome!

Photo by Jeff Auth / Flickr